King Salman Orders New Tax Rates for Oil and Hydrocarbon Producers
March 27, 2017
The Custodian of Two Holy Mosques King Salman bin Abdulaziz has issued a royal decree establishing a new tax system for oil and natural gas producers in the Kingdom.
Under the new tax rates, oil and hydrocarbon companies will be taxed depending on their gross capital investment. Companies with capital of over SR375 billion ($100 billion), their income tax rate will be 50 percent. Companies with a capital investments between SR300 billion and SR375 billion ($80 billion and $100 billion), the income tax rate will be 65 percent. Companies with a capital investments between SR225 billion and SR300 billion ($60 billion and $80 billion), the effective tax rate will pay 75 percent, and those with capital investment below SR225 billion ($60 billion), the effective tax rate will pay 85 percent.
The new tax rates will be retroactive to January 1, 2017.